Live Update

Wednesday, August 26, 2009

08/26/2009 Market Recap: Small body bar again

Summary:

No conclusion, small body bar formed today could mean either a continuation or reversal.

US$ could pullback tomorrow.

Oil could rebound tomorrow.

  Trend Momentum Comments - Sample for using the trend table.
Long-term Up    
Intermediate Up Neutral* Further confirmation needed for the intermediate-term buy signals.
Short-term Up Neutral  
My Emotion Up   Still think this is a bear market rally.

Small body bar again, so still no direction. Let’s see tomorrow. Just from my experiences, consolidation with a series of small bars usually breakout twice and the very first breakout could be a false one, so beware.

1.0.3 S&P 500 SPDRs (SPY 30 min), could be a Symmetrical Triangle, just statistically the upside breakout has only 54% chances so it virtually tells nothing about the future direction.

SPY30min

1.1.3 QQQQ Short-term Trading Signals, could be a Bearish Tri Star, just again statistically the downside breakout has only 52% chances so it too doesn’t tell us about the future direction.

QQQQDaily

As mentioned in the After Bell Quick Summary I bet a close green tomorrow because CPCI > 1.55. There’re 2 additional reasons though:

3.1.0 PowerShares DB US Dollar Index Bullish Fund (UUP Daily), black bar, so US$ could pullback which is good for the stock market.

UUPDaily

3.4.1 United States Oil Fund, LP (USO Daily), hollow red bar, so oil could rise which also is good for the stock market.

USODaily

The char below is a longer history view of CPCI, as mentioned in the After Bell Quick Summary, I didn’t see any edges about what would happen next whenever CPCI > 2.0. Well, here’s the chart, see for yourself, maybe someone could deduce a formula out of this chart?

CPCILarge

8 comments:

  1. The high $CPCI is from hedge funds acting on that sell signal I have been writing about. The individual who developed the signal has worked for all the great hedge funds and basically every financial house. Although by my count a sell signal for the SP was triggered Friday or Monday, I have seen others on different message boards write that one was triggered yesterday. $NDX had one triggered yesterday.
    Larry McMillan's 21day weighted equity put-call ratio has been dropping like a heavily-weighted anchor the last few weeks to multi-multi year lows and I haven't seen any data for 1 1/2 weeks.
    He mentioned a couple of months ago that put-call ratios didn't work in 2000 because institutions were heavily hedging themselves.

    ----Mr. Panic

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  2. There's so much noise right now. I hesitate to do much of anything, but yes, I also had a sell signal as of Monday and technically it's still on, but with those high readings it's possible we're bottoming. I don't see this as a tradeable market till the uptrend reinitiates or a downtrend is establish. These small up/down moves are meaningless, and who wants to bet on a gap? It could go any way it wants with all the funny money out there and Goldman ready to screw the majority of traders at any time. The question is: are you on the same side of the trade as they are?

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  3. Cobra awesome work....
    Mr Panic, I repsect your input - you have a blog or anywhere to`follow you?

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  4. No blog. I just post over at stockstop.org. I am just using ideas I have seen various TAs discuss over the years. There used to be a business channel in LA and they had all the great analysts on as guests something CNBC never did. I was fortunate enough to discover these great TAs and their work and many great tools like the McClellan Oscillator were developed by TAs who were influenced by other TAs that frequented this channel. I am kind of new to the blogs. I only discovered Cobra back in March or April. I used to just watch the Yahoo boards. And Cobra has one of the best blogs and I like how unpretentious it is. And I hate discus; I will never post on it.

    -----Mr. Panic

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  5. Cobra,

    Nice blog and good info. First time visitor.I was looking at P&F chart of CPCI. Last time CPCI was in this range was in october 08 and it went down to 1.0 which indicates downside.

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  6. Hello Cobra,

    I think looking at ISEE in conjunction with $CPC, and $CPCE, $CPCI, etc. suggests that downside is limited. ISEE has been reading very LOW lately, more likely indicative of near term market LOW.

    I know you have not been focusing on STEM MR models lately, but both (NYSE and NASDAQ)STEM MR models are again firmly oversold.

    Also, Cummulative TICK Intraday NYSE is also closer to oversold level than it is to overbought,...viewed together with STEM MR mmodels,..suggests to me that near term upside more likely.

    Your SP500 symmetrical triangle looks valid,.. likely a continuation pattern,...expecting an upaide breakout.

    Agree with you also on the relevance of US Dollar and Oil in trying to figure likely SP500 direction. And US Dollar is slightly weker this Thurs morning.

    Near term, ..with Labor Day Holiday approaching (seasonally positive bias pre-holiday) I am looking at upside into 08-28 to 09-01.

    Clearly the ADP numbers will be most likely near term catalyst.

    Thanks for sharing your good work. Thanks too Mr Panic and others who post here,.. good to see what everyone is thinking.

    Regards, Jim P.

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  7. Cobra Jim P & Mr. Panic

    Thanks!

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  8. More good posts by Mr. Panic and Jim P.

    It's good to see different opinions, and Mr. Panic thinks we go down today or tomorrow, and Jim P. thinks we go up. As much as I'm a bear right now, that doesn't make me any money if the market is in bull mode. Hearing both sides balances out things, and hopefully helps everyone to trade better.

    I'm going to side with Jim P. today, as I think the market has another leg up in it. Even with many negative charts against, I don't think we will go down until there is more volume in the market. That won't happen until 1st or 2nd week of September.

    It is my opinion that the bears are scared to short (yes, that's me!), and the bulls don't have a reason to sell. Unless there is a scare in the market, the bulls won't sell. It's going to take the bulls selling first to start this correction down. Then the bears can jump on.

    The unemployment number will be view as good again. Many people are on vacation now, and I don't think many employers will fired them if they are on vacation. Kids will be going back to school soon and vacations will be over. Everyone will be back to work fulltime. Employers then will take another look at the hard numbers and more firing will happen... especially closer to the fall/winter months. Retail sales will still be bad this holiday season.

    Bottom line. After being burnt too many times, I'm sitting the sidelines until the first or second week of September, when traders come back from their vacations. The PPT (or Goldman Sachs) won't be able to hold the market up once volume returns. Who knows? Maybe the government will stage another attack like 911 to blame the coming correction/crash one.

    Dan Black

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